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Rail News: Rail Industry Trends

Average train speed a lingering service metric issue for U.S. Class Is, Smith Barney/Citigroup says

Eight weeks into 2005, the U.S. Class Is still are struggling to boost average train speed while their Canadian counterparts are increasing velocity. Through Feb. 25, average train speeds stood at 24.6 mph for Kansas City Southern, down 11 percent; 21.5 mph for Norfolk Southern Railway, down 7.1 percent; 19.6 mph for CSX Transportation, down 6.8 percent; 21.0 mph for Union Pacific Railroad, down 6 percent; and 24.3 mph for BNSF Railway Co., down 4.4 percent compared with the same 2004 period, according to Smith Barney/Citigroup's ground transportation research report.

"CSXT's bulk carloads have improved nearly 7.5 percent (as of Feb. 19), which is likely having a slowing impact on the railroad's average train speeds as grain and coal volumes travel at slower speeds than other commodities," said Smith Barney/Citigroup Managing Director and Progressive Railroading columnist Scott Flower in the report. "However CSXT's service metrics remain lackluster in comparison to last year and will need to improve in the months ahead in order to support overall carload growth … [and] drive earnings improvement."

Meanwhile, Canadian Pacific Railway and Canadian National Railway Co. increased year-to-date velocity 3.5 percent to 24.3 mph and 2.8 percent to 23.7 mph, respectively, compared with last year.

"Canadian Pacific's average train speed increase … [is] tops among the North American rails," said Flower. "However, the railroad's impressive performance has been largely driven by easy comparisons, [so] service metrics will likely show some moderation as the year progresses."

In terms of total cars on line, all seven Class Is continued to register year-over-year increases through eight weeks: KCS, up 7.5 percent to 27,007 cars; NS, 5.5 percent to 194,437 cars; BNSF, 2.8 percent to 198,877 cars; CSX, 1.8 percent to 234,162 cars; UP, 1.1 percent to 321,995 cars; CPR, 0.4 percent to 69,004 cars; and CN, 0.3 percent to 114,929 cars.

All U.S. Class Is' average terminal dwell times are on the rise, as well. Through eight weeks, CSXT's average (based on 12 terminals) rose 11.1 percent to 30.2 hours; NS' (14 terminals) increased 5.5 percent to 24.9 hours; KCS' (four terminals) went up 3.9 percent to 28.1 hours; UP's (13 terminals) rose 3.7 percent to 30.1 hours; and BNSF's (11 terminals) increased 0.4 percent to 9.9 hours compared with last year. CN's (nine terminals) and CPR's (nine terminals) average dwell times dropped 4.7 percent to 14.9 hours and 3.8 percent to 35.8 hours, respectively.

Contact Progressive Railroading editorial staff.

More News from 3/7/2005